Carmel pays to lure luxury hotel

The city has approved more than $67 million in taxpayer incentives to attract $310 million in private investment in its downtown area. This video features five major projects under way.
Stephen J. Beard / IndyStar

Carmel will pay firm $20,000 a month to lure Marriott

Carmel hopes to lure a luxury hotel to City Center.(Photo: Provided by Carmel.)

Carmel is moving aggressively to land one of the final remaining pieces of its signature City Center development, signing two contracts that could ultimately pay out hundreds of thousands of dollars in consultant fees combined.

The five-story hotel would be built directly east of the Palladium in the L-shaped open space at City Center and its parking garage.

Coury will work as Carmel's representative in negotiations with Marriott to develop the hotel, Coury's specialty. Each hotel in the Autograph Collections series has its own name, branding and design. There are 140 in the United States.

Carmel anticipates the contract will last through the hotel's development, which could take years. Once the hotel is built, Coury will sign an operating contract between Carmel and Marriott to manage the hotel.

Carmel can cancel the contract, but the consultant is guaranteed at least three month's pay: $60,000. If Coury works for a year before the contract is terminated, it's guaranteed at least $350,000.

The commission also agreed to pay MMGY Global $89,500 to develop branding for the hotel. The firm gave Carmel a 25 percent discount because it has a partnership with Coury.

Corrie Meyer, the commission's director, said working with the consultants is a necessary step toward luring Marriott. She also noted Carmel and Pedcor, the developer behind City Center, have no experience building hotels.

Mayor Jim Brainard has been trying to bring a boutique hotel to City Center for more than a decade, but his plans were stalled during the recession and the slow recovery.

Brainard said it's likely the city would provide incentives for the hotel, though he didn't have specifics. The incentives probably wouldn't include new parking. He said existing parking structures and surface lots at City Center would be sufficient to serve the hotel.

Brainard hopes to begin construction this fall or next spring but said that's more of a goal than a promise. He said similar hotels cost $250,000 per room to build, which could put the price tag at $25 million to $30 million. However, he stressed that was an estimate. Rooms could rent from $100 to $300, another estimate.

He said he thinks the hotel will attract economic development, pointing to several corporate headquarters that are moving to the area, including Merchants Bank, MJ Insurance and Allied Solutions. He said it also would provide more incentive for tourists and music acts to visit the Palladium.

"'Every city should have a good downtown hotel," Brainard said.

The hotel won't be the city's last major investment in City Center. Brainard is exploring options to build a museum for the Great American Songbook Foundation east of the Center Green at The Center for the Performing Arts. The foundation currently has its archives and museum at the Palladium.

Pedcor owns the land on which Brainard wants to build the museum, which currently is slated for a building with 40,000 square feet of apartments and commercial space called The Windsor. If the museum is built, that project would be cancelled.